Working For Money vs. Money Working For You

You know how people say that you should always have your money working for you rather than you working for your money? I.e. passive income?

Here’s what that means in the real world :)

  • When I was a kid I’d spend one hour mowing a lawn and earn $10
  • When I was a teen I’d spend all weekend at a restaurant to earn $50
  • When I was in college I’d spend 20 hours a week and get $150
  • When I got my first “real” job I’d spend 40 hours a week to get my hands on $500
  • When I moved up the ladder a bit I’d spend 50 hours a week to bring home $1,000
  • When I became self-employed I’d work 60-70 hours a week and barely bring back $1,500

Each of these cases required gobs of my time in return for these precious piles of greenbacks.

Now get this…

Last month I spent 0 hours on my investments and made a whopping $32,687.28.

In one month.

For doing absolutely nothing.

That equates to 3,268 hours of mowing lawns, 653 weekends of working at a restaurant, 218 weeks working at the college bookstore, 65 weeks at my first full-time job, 33 weeks after I climbed up the ladder, and 22 weeks when I first became self-employed.

That’s a lot of working for the exact same pay! And the exact difference between working for your money and having your money work for you ;)

Now obviously with investing you have plenty of down months too depending on what you’re investing in (stocks, real estate, businesses), but the net result is almost guaranteed to be amazing if you keep at it for the long haul. And it all starts with a couple dollars locked in a bedroom, candles lit with slow jams on, until bow chicka wha wha! BABY MONIES!!! Who go on to create baby monies of their own until one day you wake up to a huge (incestuous) family of monies you can play with in retirement :)

Whoever said budgets were sexy had it wrong. It’s more like passive income is sexy, baby! Haha…

And in case you’re wondering, this is also how “the rich get richer.” It’s not that they’re necessarily working more than you are, it’s just that their gobs of money are exploding at a much faster pace than yours. In fact, the more money you have the less talent it takes to grow it – hah! (Okay, that may not be right all the way, but you get what I’m saying ;))

Point is, you need to start funneling those dollars over NOW if you’re serious about growing wealth. I don’t care how you do it or how much you put in (you can literally put in pennies if you want to!) but plant those seeds now and get your family growing… It’s boring at first, but once the momentum picks up you’ll quickly notice how empowered you feel and how much extra money you somehow seem to have to keep feeding the flames too.

It’s hard for you to make money, but it’s not hard for your money to make money.

You just gotta start the motion.

And speaking of pennies, check out one of my favorite examples of compound interest I’ve ever seen on the internet. This is what happens when you double a penny for only 30 days in a row. It’s insane:

doubling penny millions

There aren’t any investments that will give us such a return, but we all have a penny to start with!

Get out there and make some babies!

This is the first time btw that I’ve ever compared the evolution of how I’ve made money over the years… I wasn’t going to post this cuz I didn’t want to come off as boastful, but I was just blown away at how drastic the comparisons were! I mean, $30k for doing nothing?? It’s crazy, right? And yet so simple a caveman can do it anyone can do it! ;)

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  1. Hannah November 20, 2015 at 6:23 AM

    It’s pretty amazing to have your first month where passive wealth surpasses all the income you earn from your job. Passive income is indeed sexy (but budgets are too).

    1. Stockbeard November 20, 2015 at 4:32 PM

      Agreed, but it’s proportionally scary to see your wealth drop by much more than you actually make, on bad market months (August this year, anyone?). I prefer to look at the overall year, to avoid emotional roller coasters :)

      1. J. Money November 24, 2015 at 6:29 AM

        Yeah, that’s the downside to this stuff – it only actually *counts* once you pull the trigger and take the money out :) But luckily if you wait decades there will be a $hit ton more to take out!

  2. Mrs. Money Monster November 20, 2015 at 6:47 AM

    Wow…looking at what you made last month in passive income has suddenly made me feel quite inadequate :) We’re getting there, though. And the journey is part of the fun, right? I LOVE reading these articles and getting pumped. It’s so motivating to see someone who has done it and is enjoying the fruits of their labor, or, in this case, the passive cash that is being generated without labor). Even better! We just started our outside-of-retirement investment vehicle (aside from continuing to pay off the mortgage) and we’re hungry to put every. spare. dollar. into it. Thanks for the Friday morning motivation.

    Rock on!
    Mrs. Money Monster

    1. J. Money November 20, 2015 at 3:31 PM

      Good job on stashing away those extra dollars! We all go in phases with that stuff but I remember the beginning phases being the most exciting once things start clicking :)

  3. Sarah Noelle @ The Yachtless November 20, 2015 at 6:52 AM

    Thanks for this reminder. :) I’m really only starting to realize that even little amounts of money do make a big difference over time. I think part of the reason I had so little interest in investing for so many years was because I thought, well, I don’t make very much and thus wouldn’t be able to invest very much, so why bother? But to think how much more I’d have now if I’d even bothered to invest $20/month…Ah well, too bad! In any case, I’m now investing about $250/month, spread across Betterment, Acorns, and my Roth IRA. Better late than never.

    1. J. Money November 20, 2015 at 3:32 PM

      And $250 is A LOT too! Especially at your age… I used to blow that on alcohol every weekend ;)

      1. Sarah Noelle @ The Yachtless November 20, 2015 at 10:38 PM

        Welllll, I might be a bit older than you think. But yes, I feel good about the $250 right now — and hopefully I can increase that amount soon!

  4. Brian @ Debt Discipline November 20, 2015 at 7:03 AM

    Just think of the impact we could have if every high school student understood these principals. All about starting early. Passive income is a beast.

  5. Kalie November 20, 2015 at 7:23 AM

    Great post; I wish I would’ve understood this earlier than I did. But it does take some years of working for money before most people can get their money working for them. My 4-year-old was just telling me that you can’t count to a million counting by ones. “You have to count with different numbers,” he said, and he was talking about his favorite car-ride game–asking me to double 2, 4, 8, 16, etc. I couldn’t help but think he was talking about compounding interest and how true it is that you don’t get to a million one by one.

    1. J. Money November 20, 2015 at 3:33 PM

      Gotta get him groomed early to take over his parents’ blog ;)

  6. Roy Largo @ Band of Savers November 20, 2015 at 7:23 AM

    I agree! it is awesome when you money is earning you an income without you having to do a single thing for it. Last month my investments made me twice as much as my job did. But the flip side of that really sucks when your money goes on strike like it did back in August and September. That’s why we choose to look at all of our investments as long term and my jobs as the short term that gets us there.

    I love it when it just so happenes that your posts line up nicely with my most recent posts, my last post discusses the Rule of 72 and how it is used to estimate how long it will take your investments to double in value. It makes me feel like I’m onto something good if it lines up with the upcoming J$ post.

    1. J. Money November 20, 2015 at 3:34 PM

      Haha… well you’re definitely onto something good regardless if we match up or not :) And that 72 rule is great too!

  7. Dee @ Color Me Frugal November 20, 2015 at 7:38 AM

    Compound interest is awesome! We are currently in turbo mode on debt repayment, but once the debt is gone (about six months), we definitely plan to start funneling some of the freed-up cash into investments!! Cannot wait!!!

  8. Tiffany Alexy November 20, 2015 at 8:26 AM

    “And it all starts with a couple dollars locked in a bedroom, candles lit with slow jams on, until bow chicka wha wha! BABY MONIES!!! Who go on to create baby monies of their own until one day you wake up to a huge (incestuous) family of monies you can play with in retirement :)”

    Bahaha thank you for the laugh!

  9. Free to Pursue November 20, 2015 at 8:29 AM

    Not boastful at all, and highly effective in getting this important point across. I think you just condensed “Your Money Or Your Life” in the best way imaginable!

    1. J. Money November 20, 2015 at 3:35 PM

      I still need to read that book!!

  10. Justin @ Root of Good November 20, 2015 at 8:31 AM

    Love it, J$. I still remember my first dividend payment almost as fondly as the birth of my first child. I was sitting in my cubicle, just before the Christmas holidays. Overcast skies making the mood dreary. Then I logged into my Vanguard account and saw a little over $100 magically appear in my account. The first of many dividends I would receive. That $3000 investment in Vanguard’s Pacific Index Fund (VPACX) netted me some triple digit love just in time for Christmas (I didn’t spend it of course :) ).

    1. J. Money November 20, 2015 at 3:37 PM

      The same as the birth of your first child, haha…. one a lot less scarier! I remember thinking how insane it was that someone would allow me to take a real life human being home with me without any “how to” manual or anything… boy do you learn fast! :)

  11. Lisa O November 20, 2015 at 9:21 AM

    Nice graph J$! Compounding interest is the best thing next to having time on your side to save….

  12. Chris "Stasher" November 20, 2015 at 9:43 AM

    I’ve got all my funds split around and they do all generate nice returns but the desire to dump into just one account (VXC) like you did is tempting. I like the mixed Euro/US Vanguard fund over our homegrown Vanguard (VCN) as it is so heavily weighted with equities (Oil stocks) that the volatility is intense. The quarterly dump of dividends is from the Vanguards is awesome and love putting them right back to work by buying more ETF units. My market exempt (private equity) funds generate stable great returns but the only problem is that the dividends get spot out into a cash holding account and my money doesn’t go to work right away for me (a sleeping army) Anyhow, kick ass on the monthly growth dude and keep hustling and spreading the sexy money love. Cheers Chris

    1. J. Money November 20, 2015 at 3:40 PM

      It’s def. nice and easy/simple being in one, but if you know what you’re doing like it seems you do (much more than I it seems!) you’re probably fine either way. I may add a bond index or foreign index later, but right now I’m liking the minimalist approach :)

  13. Shannon @ Financially Blonde November 20, 2015 at 10:06 AM

    I tell my clients all the time that they work hard for their money and they need to make sure their money is working for them. If you leave money sitting in a checking account it’s the equivalent of allowing your money to be a couch potato. If you invest your money, it’s the equivalent of putting your money on a treadmill and getting it into shape for you. Congrats on an awesome month!

    1. J. Money November 20, 2015 at 3:41 PM

      Boom! Great analogy!

  14. Maggie @ Northern Expenditure November 20, 2015 at 10:41 AM

    Excellent overview. I should dig out my jobs and how much I made over the years. And, obviously, I love the description of how to make baby monies. Happy Friday!

  15. B.C Kowalski November 20, 2015 at 11:00 AM

    I remember that penny trick from grade school – if only there was something that paid that kind of return! (I’m a writer not a math guy – that’s 100 percent return, right?)

    1. Josh November 20, 2015 at 12:03 PM

      Correct. That would be 100% return (compounded daily in the above case). ;-)

  16. Michelle November 20, 2015 at 11:37 AM

    Love this! Making your money work for you is the best thing ever!

  17. Kristi @ Femme Frugality November 20, 2015 at 11:41 AM

    Wow, congratulations on such a great return on your investments! That’s awesome, not boastful!

  18. Dividend Mantra November 20, 2015 at 1:49 PM


    Couldn’t agree more!

    Money doesn’t sleep, get sick, or tire. It just works for you, relentlessly, 24/7. And it can work far harder than you can once you’ve got enough of those workers out there buzzing around for you, as you saw firsthand this month. It’s much better to be an investor than a worker. And it’s not even all that hard to make that transition. You just have to start. :)


    1. J. Money November 20, 2015 at 3:42 PM

      You know it, good sir. Gotta make money our bitch!

  19. Tawcan November 20, 2015 at 2:13 PM

    This is exactly why I love passive income so much. I see every dollar (or penny ;)) as a seed. It’ll grow into something bigger and able to produce more trees in the future.

    That compound interest example is one of my favourites, used to do math problems based on that.

  20. Steve Miller November 20, 2015 at 2:16 PM

    Yeah, it’s great when your monthly returns hit it big like that. I was looking at my returns for October and they were larger than my yearly salary for most of my working years — all in one month.

    But it’s all winnings on paper. If you take the year as a whole, my return for the year is less than 1%. But I can’t complain — over 10 years, I’ve received over 8% return on investment ANNUALLY. So someone putting $100k in an investment fund and letting it sit for 10 years at 8%, they would have $215,982 with no effort exerted. That’s money making babies!

    1. J. Money November 20, 2015 at 3:44 PM

      Yup! That’s the only less sexy part really – that you don’t actually get to take out the $$$ and see it in cold hard cash :) I suppose at some point you will, but until then just gotta keep lighting those candles and get ready for the party one day! It’s a beautiful thing!

  21. MissGF@Gleefully Free November 20, 2015 at 5:35 PM

    I don’t feel like my money is making a lot of baby monies yet but when I look back to the beginning of the year it really is a pretty significant increase–mostly from saving. I think I have heard people say you really start to notice the compounding when you get up over about $200,000.

  22. IceNine November 20, 2015 at 11:15 PM

    This is kind of a deceiving post. It sounds impressive….until you look at the -$7,000 in September and the -$23,000 in August. I don’t really consider the short term rises in the stock market to be passive income.

    1. J. Money November 24, 2015 at 6:35 AM

      Yes, true the market swings in both directions, but I can tell you for a fact I didn’t invest $400,000 into the market over time ;) I’ve never calculated it before, but I guarantee 50-60% of that money were all gains. So whether it counts as passive income now, or decades from now when it gets pulled out, it’s still money that was made without lifting a finger.

  23. James November 21, 2015 at 6:28 AM

    Having money work for you… works wonders! Getting to the $1K/day passive income is extremely impressive. Congratulations. Money never sleeps or takes days off. That’s the best part!

    1. Icenine November 23, 2015 at 4:55 PM

      I guess money takes a day off when you lose $23,000 in a month when the stock market goes down.
      Again, this passive income is for an isolated month. If you include the losses from August and September, it amounts to a ‘passive income’ of $22 per day…

      1. J. Money November 24, 2015 at 6:39 AM

        And if you go back to other months in the year it’ll be different too. You can cherry pick anything to make a case which you and I are both doing here, but the overall point is that it’s much better to set your money on a course to earn for you vs trading manual labor for it. That’s what I’m trying to get into peoples’ heads today.

  24. jestjack November 21, 2015 at 7:12 AM

    Congrats….but a word of caution….The Fed is going to raise rates. It’s a lot easier to make money when the cost of capital is 0% then when it’s 4-5%….the historic norm. Then the worries of inflation…oil prices….a strong dollar come home to roost…. “Keep your powder dry”….I remember getting statements back in ’08 that were “breathtaking” and not in a good way. Let’s not forget Washington Mutual was “swept away” the last time the “tide went out” and they were huge. The market just may be a “bear trap” right now.

  25. Prudence Debtfree November 21, 2015 at 8:07 AM

    Don’t apologize for “boasting”! Some people (like me) need really in-your-face examples of real life money situations to get it. I got it. Thanks : )

    1. J. Money November 24, 2015 at 6:40 AM

      Thanks friend! You’re always so encouraging :)

    1. J. Money November 24, 2015 at 6:42 AM

      Yikes! Exactly why I don’t mess around with chasing stocks anymore! Everyone thinks they’re an expert…

  26. John Europe November 22, 2015 at 4:00 PM

    But how much money is enough? I think that is a starting point here. After answering that one (almost impossible) you can mobe money to generate it self. Key problem is a mindset. Let’s say my goal i sto reach 1 mill. savings. If I reach it, what next? Most people will move to 2 mill. goal. But imagine that you sign a contract with public notary saying you only need 1 mill. Even if you do so, you are again I problem. Maybe even biger one. You reached your goal. Ordinary people need a goal, need a carrot. :)


    1. J. Money November 24, 2015 at 6:45 AM

      It’s definitely a slippery slope, yes :) and usually at the end of the day we realize it was never about the money to begin with! I’m constantly evaluating my lifestyle and trying to figure out what truly makes me happy… it’s taking a while, but I get little insights here and there.

  27. Our Next Life November 22, 2015 at 11:34 PM

    Wow — that’s crazy good for a month of returns! (One month?! Seriously?!) We’re at the point now where, even though we’re socking away money FAST, the markets still have a bigger effect on our portfolio than our contributions do. It’s humbling when times are bad, but also exactly what every investor is going for. That’s how things G-R-O-W, which is what we need ’em to do, so that we can have a long, fun retirement! :-)

    1. J. Money December 2, 2015 at 6:43 AM

      Oh yeah – the market rules many portfolios once you get up there! Which is why some diversify more and get into other things like real estate or opening up businesses, etc. We all have our investing drug of choice :)

  28. Christine @ The Pursuit of Green November 23, 2015 at 12:43 PM

    Love it! Its such a nice comparison J$. And puts “making money work for you” into an understandable perspective. On my way there hopefully! I’ve started it but slowly building it up month after month until one day, it’s working itself!

  29. Dividend Quest November 24, 2015 at 2:32 AM

    Preach it, brother!! Having money make more money is passive income at its finest. I love knowing that my money is making more money no matter what I’m doing. Passive income gives you more options in life, and having more options is what the game of money is all about.

  30. Jan December 1, 2015 at 9:25 PM

    Thanks for the interesting articles. Do you invest in index funds? Or individual stocks?
    Do you dollar cost average into index funds? What is your strategy? Thanks.

    1. J. Money December 2, 2015 at 6:47 AM

      I used to invest in a smattering of everything (individual funds, mutual funds, dividend funds), then about a year ago I wised up and stopped trying to beat the system and switched to index funds only :) In fact, just *one* index fund – VTSAX. That’s where all my investing dollars are.

      You can read why here:

  31. Mr. Enchumbao December 6, 2015 at 4:49 PM

    Awesome read. Make that money work for you day and night. I just wrote an article about passive income streams, in preparation to start putting out passive income updates but in percentages. We’re not as brave as you guys are to put out our numbers!

    1. J. Money December 7, 2015 at 7:37 AM

      You get used to it after a while :)

  32. Eff You Money December 7, 2015 at 4:32 PM

    Whoa, nicely done!

    Right now my dividends are giving me about $20/month, and they’re not even “dividend stocks.” It’s a tiny amount compared to some, but the feeling is pretty cool.


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